The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Sunday, 13 November 2016

Imperialism in the Twenty-First Century

Despite the ongoing ramifications of the
global economic crisis of 2007/2008, capitalism continues to reap super
profits. In his fascinating book Imperialism in the Twenty-First Century:
Globalization, Super-Exploitation and Capitalism’s Final Crisis (Monthly Review
Press, 2016) John Smith unravels the underlying dynamics of global capitalism. By
tracing the production of the T-shirt, the cup
of coffee, and the iPhone, he demonstrates how these generate the transfer of
enormous surplus value from countries in the Global South to transnational
corporations in the North. In this blog post, I will outline several of
the key contributions of this book and offer a number of critical reflections.

The
centrality of Global Labour Arbitrage

In his detailed analysis, Smith
indicates clearly how bourgeois, mainstream economics hides the exploitation of
workers in the Global South underpinning super profits in the Global North. ‘The
flow of wealth from Chinese and other low-wage workers sustaining the profits
and prosperity of Northern firms and nations is rendered invisible in economic
data and in the brains of the economists’ (P.22). The way production has become
transnationalised across borders and organised in so-called Global Value Chains
is at the heart of the transfer of wealth from the Global South to the North,
the organisation of exploitation of labour by capital on a global scale.

It is Global Labour Arbitrage, ‘the
substitution of relatively high-wage workers in imperialist countries with
low-wage workers in China, Bangladesh, and other nations in the Global South’
(P.188), Smith argues, which has allowed capital to continue reaping super
profits since the major economic crisis of the 1970s. In line with the Marxist
labour theory of value, only living labour can generate surplus value and this
role is now increasingly performed by living labour in the Global South.

Conditions
of super-exploitation in the Global South

In Capital, Marx identified three ways
of how capital can intensify exploitation in order to increase surplus value,
profits. First, it can focus on absolute surplus value through extending, for
example, the length of the working day. Second, it can focus on relative
surplus value by introducing new technology into the production process and
thereby increasing labour productivity. Finally, capital can reduce wages below
the value of labour-power, i.e. below the level which workers need in order to
ensure their own re-production. It is Smith’s major contribution to discuss
this third way of increasing surplus value, something which Marx identified but
never developed in detail himself (P.197).

Against the background of a vast supply
of cheap labour in the Global South, the rates of exploitation of workers in
the North and South differ, with wages in the latter being below the value of
labour-power. ‘Global labor arbitrage-driven outsourcing is driven by lust for
cheaper labor, and corresponds most directly to the “reduction of wages below
their value”’ (PP.238-9). In short, the attraction of labour in the Global
South is not only that it is cheap labour, but it is also the possibility of a
higher rate of exploitation of these workers. ‘Global labor arbitrage is the
form taken by the third form of surplus-value increase’ (P.249).

Critical
reflections I: Productive versus unproductive labour.

In his analysis of global labour
arbitrage and how value is transferred from the Global South to the North in
this process, Smith emphasises the importance of the distinction between
productive and unproductive labour. It is only the former, workers employed in
sectors producing concrete goods, who can create value. Workers employed in
services related to the selling of goods on the market cannot. ‘The more that
social labor is employed non-productively, in commerce, finance, security,
legal services, etc. – exactly what has been happening on an accelerated scale
in the imperialist economies during the neoliberal era – the greater the
downward pressure on profits and the greater the imperative to compensate for
this by intensifying the exploitation of productively employed workers’
(PP.63-64).

Hence, it is productive labour in the
Global South, which produces the value consumed by non-productive labour in the
North. ‘This growing asymmetry therefore implies that a significant and growing
proportion of value consumed in non-productive activities in imperialist
countries was generated in low-wage countries, and that Northern capitals
operating in nonproduction sectors are valorized in part by the living labor
expended in Southern production activities’ (P.272).

From a focus on class struggle and
resistance, however, it is dangerous to pit productive against unproductive
labour. Workers in the service industry as well as non-wage labour in the
household, and thus non-productive labour, are equally important for the
capitalist social relations of production and workers’ ability to reproduce
themselves. They are equally subjected to increasing levels of exploitation. When
thinking about the capitalist social relations as a whole, it is, therefore, in
my view more useful to think in terms of a ‘social factory’ as discussed by
Harry Cleaver, which encompasses productive and non-productive wage labour as
well as non-wage labour (Cleaver 1979/2000). Going beyond
struggles at the workplace is essential, when assessing the possibilities of
resistance against exploitation.

The ‘social factory’ also becomes
important when analysing the ways of how the wages of Chinese workers, for
example, are driven below the level workers require for their own reproduction.
Smith suggests in the book that rising unemployment alone, ‘even before we take
into account the much harsher labor regimes and political repression prevalent
in low-wage countries, exerts a powerful force that makes the price of their
labor-power fall below its value’ (P.237). Nevertheless, on its own this
explanation is not satisfactory, as it would imply that workers would not be
able to survive. A focus on the ‘social factory’ can reveal how migrant workers’
continuing access to land back home is part of their social re-production,
making up for missing wages.

Critical
reflections II: The role of free trade

In his focus on global labour arbitrage,
Smith underestimates the importance of ‘free trade’ for imperialism in the 21st
century. He does acknowledge ‘free trade’ as a factor of how surplus is
transferred from the Global South to the North, when labour-intensive goods are
exchanged with capital-intensive goods.‘Workers
in firms employing more advanced technology do not themselves produce any more
value in a given period of time than workers employed by more backward firms,
but the higher productivity of workers in the former does allow their employer
to capture part of the surplus value generated in the latter’ (PP.244-5).

Nevertheless, he overlooks the
importance of ‘free trade’ for the maintenance of global labour arbitrage in
the first place. Transnational production organised in global value chains
across borders can only function properly and smoothly, if it is easy to move
parts and finished products easily from one country to the next. Any disruption
to ‘free trade’ would endanger transnational production networks and, thus, global
labour arbitrage. It is for this reason, why the current negotiations of an
expanded ‘free trade’ regime reflected in the Transpacific Partnership
Agreement (TPA) and the Transatlantic Trade and Investment Partership (TTIP)
are so crucial for capital (Bieler 2015). It extends
‘free trade’ into new areas as well as assures the functioning of transnational
production. This is why Ray Kiely refers to the current global order as ‘free
trade imperialism’ (Kiely 2010: 7).

Critical
reflections III: All roads lead into crisis and the role of agency

In the final chapter of the book, Smith
reflects on the unsustainability of the rising debt levels of emerging markets.
‘According to a study by McKinsey, total emerging market debt rose to $49
trillion at the end of 2013, accounting for 47 percent of the growth in global
debt since 2007’ (P.308). All roads lead into a final, inevitable crisis of
capitalism and the only alternatives are socialism or nothing. However, what
about agency of resistance? Overall, Smith’s narrative takes on a rather
structuralist account of capitalist development and final demise with agency of
resistance being only briefly discussed in the last three pages of the book.

Of course, capitalism is crisis ridden
and one crisis follows upon another. Nevertheless, capitalism has also proven
itself to be more robust in finding ways out of crisis than expected by many.
This is why a focus on agency and its possibilities to resist exploitation and
transform capitalism towards socialism is so essential. Smith lays the
foundation for an analysis of agency through his masterful examination of the
structuring conditions of global capitalism, but potential forces of resistance
still need to be explored elsewhere.

Overall, however, my critical
reflections should not distract from the major achievement of this study. Rich
in empirical detail, it provides excellent insights into capitalist
exploitation on a global scale in the 21st century. A must read for
everyone interested in understanding the workings of global capitalism.